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On 17 December, National Oil Corporation (NOC) declared force majeure at the 315,000 b/d Sharara oil field, which is operated by the Akakus Oil Operations joint venture and co-owned by NOC, Spain’s Repsol, France’s Total, Austria’s OMV and Norway’s Equinor. It had declared force majeure on exports from the Zawiya terminal of crude oil produced at Sharara on 9 December, the day the field was taken over by a militia named the 30th Light Infantry Battalion alongside a new popular movement uniting various civil society groups calling itself Ghathab Fezzan (Wrath of Fezzan).

Libya is producing about 1.2m b/d, close to its post-2011 revolution maximum. In September it produced an average of more than 1m b/d and in August 950,000 b/d. The most serious threat to output is currently bad weather in the Mediterranean, which at the end of November prevented tankers from loading at Ras Lanuf, Zueitina, Zawiya and Sidra. Repeated attacks on the Sidra and Ras Lanuf oil terminals in past years damaged storage tanks so capacity is now limited. This means any interruption to exports triggers a rapid cut in output.

On 8 October in London, BP group chief executive Bob Dudley, Eni chief executive Claudio Descalzi and National Oil Corporation (NOC) chairman Mustafa Sanalla signed a letter of intent paving the way for Eni’s purchase of a 42.5% interest in BP’s exploration and production-sharing agreement (EPSA). The EPSA includes three contract areas, two in the onshore Ghadames Basin and one in the offshore Sirte Basin, covering a total area of around 54,000km2.

On 8 October in London, BP group chief executive Bob Dudley, Eni chief executive Claudio Descalzi and National Oil Corporation (NOC) chairman Mustafa Sanalla signed a letter of intent paving the way for Eni’s purchase of a 42.5% interest in BP’s exploration and production-sharing agreement (EPSA). The EPSA includes three contract areas, two in the onshore Ghadames Basin and one in the offshore Sirte Basin, covering a total area of around 54,000km2.

On 8 October in London, BP group chief executive Bob Dudley, Eni chief executive Claudio Descalzi and National Oil Corporation (NOC) chairman Mustafa Sanalla signed a letter of intent paving the way for Eni’s purchase of a 42.5% interest in BP’s exploration and production-sharing agreement (EPSA). The EPSA includes three contract areas, two in the onshore Ghadames Basin and one in the offshore Sirte Basin, covering a total area of around 54,000km2.

On 8 October in London, BP group chief executive Bob Dudley, Eni chief executive Claudio Descalzi and National Oil Corporation (NOC) chairman Mustafa Sanalla signed a letter of intent paving the way for Eni’s purchase of a 42.5% interest in BP’s exploration and production-sharing agreement (EPSA). 
The EPSA includes three contract areas, two in the onshore Ghadames Basin and one in the offshore Sirte Basin, covering a total area of around 54,000km2.

The US Securities and Exchange Commission (SEC) announced on 27 August that Legg Mason Inc must pay a criminal penalty of $32.6m to resolve a Foreign Corrupt Practices Act (FCPA) violation in a scheme to bribe Libyan officials, who in 2004-10 awarded the Maryland-based investment manager’s Permal Group subsidiary and French partner Société Générale (SocGen) a flow of fund-related contracts.

A violent attack on the National Oil Corporation (NOC) headquarters in Tripoli which left two employees dead and 25 seriously injured appears to have been an attempt to cause serious damage to Libya’s oil sector by incapacitating its senior management. The attack has been claimed by Islamic State (IS), which if confirmed would make it the first attack by the jihadist group on the sector since early 2016.
At least three attackers penetrated NOC’s main building in the centre of Tripoli at 9am on 10 September.

The total budget deficit accumulated by Libya’s Tripoli-based administrations since 2011 is now LYD71bn (approximately $50bn), African Energy understands. However, since the House of Representatives legislature re-established itself in Cyrenaica in 2014, the rival interim government it appointed under the leadership of Abdullah Al-Thinni may have run up an additional deficit of LYD25bn. Until an independent audit of both the Tripoli-based Central Bank of Libya and the Al-Baida-based parallel central bank is carried out, the precise sums are not known and could be greater.

A firm international response led by the United States and a collapse in the resolve of Field Marshal Khalifa Haftar’s Libyan National Army (LNA) are the main factors which forced the unexpected return of the eastern oil terminals to official National Oil Corporation (NOC) control on 11 July, allowing the lifting of force majeure and the resumption of operations and exports. As none of the central demands set out by the LNA’s General Command appear to have been met, the underlying political tensions which motivated the crisis will remain a destabilising force.

The deal between the Tripoli-based National Oil Corporation (NOC) and Cyrenaica-based Libyan National Army (LNA) that has ensured steady oil production of around 1m b/d for the past two years has broken down, threatening a new extended blockade of oil exports, the further destabilisation of the critically weak economy and possibly the opening of a new phase in Libya’s lengthy civil war. Problems at the Ras Lanuf and Sidra terminals started on 14 June, when forces commanded by the rogue militia leader Ibrahim Jathran, notorious for his damaging blockade of the facilities that started in 2013 and lasted on and off until 2016.

National Oil Corporation (NOC) chairman Mustafa Sanalla is solidifying his control of the corporation’s commercial activities. He has appointed a trusted executive, Imad Ben Rajab, formerly manager of the products marketing department, as the new head of the international marketing department which oversees the sale of all Libya’s crude oil. Ahmed Shawki, who has run he department since 2011, will stay on as a consultant. There is some question about how willingly he stepped down.

Libya’s independent national audit authority has cancelled two power plant construction contracts worth $700m awarded by General Electric Company of Libya (Gecol) to Siemens and Turkey’s Enka Teknik in December because of irregularities in both the financing and the tender. African Energy understands that a powerful Tripoli-based militia may also have threatened violence to prevent the financing documents from being signed.

The Al-Nawasi Brigade is one of a handful of militias that now control Tripoli and most of the government entities there. Together with the Tripoli Revolutionaries Brigade, the Special Deterrence Force (Rada), and the Abu Slim unit of the Central Security Apparatus, they have taken over the main functions of the police and the military. These groups trace their origins back to the local groups that organised resistance to the Qadhafi regime during the 2011 revolution, but in reality they established themselves as protection rackets in the lawlessness that followed.

National Oil Corporation (NOC) has launched a new anti-smuggling policy after an earlier effort to stamp out the illegal trade in diesel and gasoline across Libya’s borders was allegedly blocked by complicit officials close to the office of the prime minister. One credible estimate suggests that the abuse has cost the Libyan economy at least $1.8bn/yr for the past five years and for this reason tackling the problem has become one of NOC chairman Mustafa Sanalla’s top priorities.